JC Master Legal News Issue 1010

Key Takeaways for This Issue

Deepen the pilot program for public‑offering REITs and further foster a virtuous cycle of investment and financing.
Promoting the sound development of infrastructure REITs is a key policy initiative outlined in the 14th Five-Year Plan, and it holds great significance for effectively unlocking the value of existing assets, innovating investment and financing mechanisms, broadening equity‑based financing channels, and enhancing the capital market’s ability to serve the real economy.
The National Development and Reform Commission has mandated that medium- and long-term coal supply contracts must specify price levels to prevent sharp spikes or plunges in coal prices.
　According to the National Development and Reform Commission on March 18, in order to further improve the signing and performance of medium- and long-term coal contracts, standardize contracting practices, ensure that contracts are fully and faithfully executed, and urge strict compliance, thereby guaranteeing a stable and reliable supply of coal for power generation and heat supply, a special inspection has been scheduled to assess the status of signing and fulfilling 2022 medium- and long-term coal contracts across all regions and at central enterprises.
Individuals such as those who are “caring for elderly parents and young children” are given priority processing for tax refunds.
Since the launch of the 2021 individual income tax final settlement on March 1, the tax authorities, in conjunction with the 2022 “Doing Practical Things for Taxpayers and Payers” initiative and the Spring Breeze Campaign to Facilitate Tax Services, have, following the introduction of an appointment‑based service for the final settlement, further rolled out a priority refund measure for taxpayers who are caring for elderly parents and young children, as well as those facing heavy medical expenses.

The Organization Department of the CPC Central Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Justice have issued the “Guiding Opinions on Establishing a Unified Pre-Service Training System for Legal Professionals.”
In order to earnestly implement the “Opinions on Improving the National Unified Legal Professional Qualification System” issued by the General Office of the CPC Central Committee and the General Office of the State Council (Document No. 25 [2015]), and to promote the establishment and implementation of a unified pre‑employment training system for legal professionals, the Organization Department of the CPC Central Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Justice recently promulgated the “Guiding Opinions on Establishing a Unified Pre‑Employment Training System for Legal Professionals” (hereinafter referred to as the “Opinions”), and issued a notice requiring all regions and departments to conscientiously implement these guidelines in light of their specific circumstances.

Finance & Capital Markets
The China Securities Regulatory Commission is officely implementing the spirit of the State Council Financial Stability and Development Committee’s special meeting and is making every effort to ensure the stable operation of the capital market.
Following the State Council Financial Stability and Development Committee’s special meeting on March 16, the CPC Committee of the China Securities Regulatory Commission promptly convened an expanded meeting to convey and study the spirit of the meeting and to deliberate and deploy measures for ensuring its thorough implementation.
The China Securities Regulatory Commission (CSRC) deeply recognizes that, amid the current complex circumstances, the Financial Stability and Development Committee of the State Council convened a special meeting to examine the prevailing economic landscape and capital market issues. This move was both timely and of paramount importance, underscoring the high priority attached to capital market work, fully addressing market concerns, and delivering policy measures that are highly instructive and targeted. Since the beginning of this year, China’s national economy has continued its recovery, with major macroeconomic indicators remaining within an appropriate range. Policies aimed at stabilizing growth have maintained their momentum, listed companies have posted steady and improving performance, and the capital market enjoys a solid foundation for stable operation. Short-term market volatility neither alters nor will alter the long-term trend of healthy development.
Under the unified leadership and coordination of the Financial Stability and Development Committee of the State Council, the China Securities Regulatory Commission will earnestly implement the arrangements set forth at the Central Economic Work Conference and the Two Sessions, steadfastly advancing reform and opening-up, upholding market‑based and law‑based principles, and proactively strengthening communication and coordination with macroeconomic management authorities and industry regulators. This will help maintain stable and consistent policy expectations, thereby supporting macroeconomic stability and sound financial operations. The Commission will carry out all tasks outlined in the Government Work Report, steadily advance the comprehensive implementation of the stock issuance registration system, improve mechanisms to support bond financing for private enterprises, and foster the development of venture capital. It will leverage the market’s intrinsic stabilizing mechanisms, vigorously promote higher corporate quality among listed companies, encourage greater share buybacks and additional share purchases by listed offices, and guide fund management companies to invest in their own funds. Furthermore, the Commission will refine institutional frameworks that facilitate the participation of long-term institutional investors in the capital markets, intensify efforts to cultivate public mutual funds and other types of institutional investors, and promote long-term and value‑oriented investing. In addition, it will continue to advance high‑level opening-up, strengthen pragmatic cooperation between the mainland and Hong Kong capital markets, and jointly safeguard the healthy and stable development of the Hong Kong market. The Commission will also maintain close communication with U.S. regulatory authorities, striving to reach an agreement on China–U.S. audit and oversight cooperation as soon as possible. It will promptly implement new regulations governing overseas listings, support eligible enterprises in accessing international capital markets, and ensure the continued smooth operation of overseas listing channels. Finally, the Commission will continue to provide appropriate financing to the real economy, work closely with relevant departments to effectively mitigate risks facing real estate enterprises, and promote the standardized and healthy development of the platform economy while enhancing its international competitiveness.
Going forward, the China Securities Regulatory Commission will, in accordance with the deployment and requirements of the Financial Stability and Development Committee of the State Council, officely elevate its political awareness, stay focused on the overarching theme of promoting high-quality development, further deepen and refine all relevant measures, ensure their effective implementation, and make every effort to safeguard the stable functioning of the capital market.

Deepen the pilot program for public‑offering REITs and further foster a virtuous cycle of investment and financing.
　Promoting the sound development of infrastructure REITs is a key policy initiative outlined in the 14th Five-Year Plan, and it holds great significance for effectively unlocking the value of existing assets, innovating investment and financing mechanisms, broadening equity‑based financing channels, and enhancing the capital market’s ability to serve the real economy.
In June 2021, the first batch of infrastructure public‑offering REITs were listed on the Shanghai and Shenzhen stock exchanges, marking the official launch of the public‑offering REITs pilot program. To date, 11 such products have been listed, with market operations remaining stable and liquidity and price‑discovery mechanisms generally functioning well, in line with pilot expectations. At present, the China Securities Regulatory Commission, in coordination with relevant ministries and commissions, is further advancing the infrastructure REITs pilot, refining institutional frameworks, expanding the scope of the pilot, and enhancing the functional role of public‑offering REITs, thereby fostering a virtuous cycle of investment and financing and supporting the development of the real economy.
On the one hand, work is underway to develop rules for the secondary offering of infrastructure REITs. Secondary offerings are a key feature of REIT products. Like the initial public offering, they constitute an indispensable and vital component of REIT market development. Introducing a mechanism for REIT secondary offerings will enable established, high-quality REIT managers to leverage market mechanisms to issue additional shares for asset acquisitions, optimize their investment portfolios, stimulate M&A activity, and further foster a virtuous cycle of investment and financing. At present, the China Securities Regulatory Commission is guiding the stock exchanges to promptly formulate the relevant rules and will solicit market feedback in due course.
On the other hand, efforts are being accelerated to bring pilot public‑offering REITs projects for affordable rental housing to fruition. Launching these pilot REITs initiatives is an effective policy tool for implementing the CPC Central Committee and the State Council’s decisions and arrangements to expedite the establishment of a housing system characterized by diversified supply, multiple channels of support, and a combination of renting and purchasing. This approach will help broaden funding sources for the development of affordable rental housing, better attract private capital participation, facilitate the industry’s transition to a new development model, and promote steady, healthy growth. At present, the China Securities Regulatory Commission is working with relevant ministries and commissions to study and advance the pilot program for REITs in the affordable rental housing sector, with the aim of expediting project implementation.

The Shanghai Stock Exchange is stepping up measures to stabilize the market, flexibly addressing the bond‑issuance needs of companies affected by the pandemic, and explicitly supporting the issuance of pandemic‑response bonds.
To strengthen financial support for regions affected by the epidemic, the Shanghai Stock Exchange has further enhanced its market‑stabilization measures, covering multiple areas including bond acceptance and review, issuance and listing services, and ongoing‑issue management.
On the evening of March 18, the Bond Business Department of the Shanghai Stock Exchange issued the “Notice on Further Clarifying Matters Related to Bond‑Related Business Arrangements During the Epidemic Prevention and Control Period.” The notice aims to implement the spirit of the State Council Financial Stability and Development Committee’s special meeting, proactively address the legitimate concerns of market participants, make appropriate arrangements in response to the practical needs of this exceptional period, strengthen support for bond‑related business and ensure robust service safeguards, and do its utmost to maintain the stable functioning of the capital market.
During the epidemic prevention and control period, the Shanghai Stock Exchange will temporarily suspend in-person communications and on-site consultations. However, the Notice explicitly states that services related to corporate bonds and asset-backed securities will remain operational, with flexible handling of special circumstances. Specifically, the deadline for responding to feedback on corporate bond and asset-backed security filings will be temporarily suspended, and a green channel for issuance services will be established for enterprises in regions and industries severely affected by the pandemic.
Following a high‑profile policy briefing by the Financial Stability and Development Committee, the securities regulator has issued a flurry of statements, while relief measures have been steadily stepped up. On the 18th, the China Securities Regulatory Commission, together with relevant ministries and commissions, advanced efforts to deepen the pilot program for public‑offering REITs. On the 17th, China Securities Depository & Clearing Corporation announced it would lower the minimum settlement reserve ratio for equity‑related transactions from 18% to 16%. In addition, the three major stock exchanges and the National Equities Exchange and Quotations system have successively issued notices cutting related fees, signaling a series of supportive moves in the capital markets.
Clarify that feedback on corporate bond applications may be “deferred,” and issue pandemic‑response bonds.
To advance the implementation of the spirit of the State Council Financial Stability and Development Committee’s special meeting and in accordance with the relevant work arrangements of the China Securities Regulatory Commission, the Shanghai Stock Exchange stated that it will, in compliance with applicable rules, continue to normally accept and review applications for corporate bonds and asset-backed securities. At the same time, the Exchange’s Bond Business Department has established a dedicated information‑disclosure service channel to provide consultation on disclosure matters and related business issues arising from the current epidemic, thereby supporting effective epidemic prevention and control as well as timely and accurate information disclosure. The Notice explicitly emphasizes the following:
Effective immediately, the time limits for responding to feedback on corporate bonds and asset-backed securities, as well as the termination triggers following a suspension, are hereby suspended. The resumption of these time limits will be announced separately based on the progress of epidemic prevention and control measures.
If the financial reports cited in the bond issuance application cannot be updated promptly due to the impact of the pandemic, the issuer and the lead underwriter may apply for an extension of the financial report’s validity period.
If, due to the pandemic, it is not possible to obtain the relevant signatures or seals, the lead underwriter may first issue a statement and proceed with the issuance-related work, with the signed and sealed documents to be submitted promptly at a later stage.
The procedures and content for submitting electronic application materials for issuance, listing, or transfer on a trading platform remain unchanged. For enterprises that genuinely require financing but are unable to provide the required submission documents due to the impact of the epidemic, they shall promptly report the situation and explain the reasons. The Shanghai Stock Exchange will handle such cases flexibly in accordance with the relevant policy guidelines, thereby effectively facilitating market participants in conducting their business.
The notice explicitly stipulates that for enterprises in regions and sectors severely affected by the epidemic, if bond proceeds are allocated to epidemic‑prevention and control‑related areas or used to repay corporate bonds maturing during the pandemic, a green channel for issuance will be established. This entails immediate review upon submission, ad hoc handling of special cases, streamlined review procedures, priority scheduling of review meetings, and enhanced service efficiency.
It is particularly noteworthy that corporate bonds whose proceeds are entirely allocated to pandemic‑control‑related areas may be registered or issued as pandemic‑control corporate bonds (a specific category of bonds listed on this exchange). Furthermore, corporate bonds in which at least 50% of the proceeds are earmarked for pandemic‑control‑related purposes may bear the “(Pandemic‑Control Bond)” designation. Issuers seeking to issue pandemic‑control‑related bonds shall ensure timely and compliant information disclosure in accordance with applicable regulations and contractual agreements. Asset‑backed securities shall be governed by analogous provisions.
The Shanghai Stock Exchange’s fee-cutting measures have already taken effect.
In recent years, under the unified guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange has issued fee‑reduction notices on multiple occasions to regions affected by the pandemic or natural disasters, continuously enhancing the precision and timeliness of its policies, further lowering market costs, and ensuring that these fee reductions deliver tangible financial benefits to businesses and the public.
On March 16, the Shanghai Stock Exchange issued a notice exempting listed companies in regions recently affected by the COVID‑19 pandemic from certain fees for 2022. The Exchange stated that, in order to support areas severely impacted by the pandemic, implement the spirit of the State Council Financial Stability and Development Committee’s special meeting, and leverage the capital market’s role in helping the real economy accelerate its recovery and development, it has decided to waive the 2022 listing initiation fee and annual listing fee for listed companies located in regions recently hit by the pandemic, as well as the 2022 online voting service fee for shareholders’ meetings.

The China Securities Regulatory Commission, in concert with the Ministry of Finance, has taken decisive action to strengthen penalties for financial fraud.
On March 18, the Ministry of Finance and the China Securities Regulatory Commission jointly issued the “Notice on Further Enhancing the Effectiveness of Internal Controls over Financial Reporting in Listed Companies” (hereinafter referred to as the “Notice”), strengthening the management, guidance, and oversight of listed companies’ implementation of corporate internal control standards, standardizing the internal control audit practices of accounting offices, improving the effectiveness of internal controls over financial reporting and the quality of accounting information in listed companies, and reinforcing financial and accounting supervision in the capital market.
The Notice points out that some listed companies still face issues such as insufficient attention to internal control, inappropriate criteria for identifying internal control deficiencies, and inadequate utilization of internal control evaluation and audit functions.
In response to the frequent occurrences of financial fraud and related internal control deficiencies among listed companies, the Notice emphasizes the need to enhance the effectiveness of internal controls over financial reporting. Its primary objective is to assess and mitigate the risks of false entries, misleading statements, or material omissions in financial reporting—motivated by such factors as catering to market expectations or specific regulatory requirements, maximizing personal compensation tied to financial performance, fraudulently obtaining external funding, misappropriating assets, providing unauthorized guarantees, engaging in insider trading, or manipulating the market. In particular, it seeks to guard against fraud risks posed by the “key few”—including directors, supervisors, senior management, and ultimate controlling shareholders—of listed companies.
The Notice also clarifies that government regulatory authorities will coordinate their efforts to strengthen oversight of listed companies and accounting offices. The Ministry of Finance, the China Securities Regulatory Commission, and other regulatory bodies will place particular emphasis on the effectiveness of internal controls over financial reporting, the adequacy of internal control disclosure, and the remediation of material internal control deficiencies, while intensifying penalties for cases of financial fraud and audit misconduct.

Commercial & Corporate
Demand Concerns Allayed, Coal’s Bull Run Continues
Steady‑growth policies are being maintained, which should allay demand‑side concerns. The coal sector posted strong gains in 2022; looking back at this spring’s rally, the underlying rationale was low expectations—reflected in subdued positioning—following the sharp policy clampdown in 21Q4, while catalysts included rising coal prices, improving earnings, and upward revisions to macroeconomic forecasts, further amplified by the surge in global energy prices triggered by the Russia–Ukraine conflict. This week, the coal sector has experienced significant volatility, with the first half of the week’s pullback driven by worries about demand amid economic uncertainty: weaker social financing data, a sluggish real estate market, and ongoing COVID‑19 disruptions. The anticipated robust construction start‑up phase now appears increasingly distant. Given that the market has already priced in fairly ample supply‑side expansion, demand concerns have emerged as a relatively substantial risk for the sector. Historically, peak performance in previous coal rallies—in 2018, 2011, and 2008—has invariably coincided with economic downturns. On March 16, the Financial Stability and Development Committee of the State Council convened a special meeting to address the current economic outlook and capital‑market issues. We believe a policy inflection point has been reached, and the “steady‑growth” agenda will continue to gain traction going forward, providing very strong support for energy demand, particularly for fossil fuels such as coal.
On the supply side, momentum is building, and the proactive inventory‑building cycle remains ongoing. In January–February 2022, China’s cumulative coal imports totaled 35.391 million tonnes, down 13.95% year on year; national raw coal output reached 690 million tonnes, up 10.3% year on year, with an average daily output of 11.64 million tonnes—770,000 tonnes lower than the December 2021 level of 12.41 million tonnes. Combined supply for the first two months stood at 722 million tonnes, a 9.6% year‑on‑year increase. Policy measures continue to prioritize supply security, with the National Development and Reform Commission mandating that national daily coal production be maintained at 12.6 million tonnes, suggesting further increases in supply going forward. However, the full realization of additional capacity will likely take time. Looking ahead, we still do not believe that policy‑driven suppression (aimed at boosting production and ensuring supply) will be the primary driver of sector‑wide adjustments. The coal industry remains in an active inventory‑building phase, and the concurrent rise in both volume and prices is a positive development. The long-term rationale for coal stocks lies in the fact that, while cyclical fluctuations will persist, the earnings base has shifted significantly higher compared with the past, leaving room for valuation re-rating.
Global demand for coal is expected to remain robust. The Russia-Ukraine conflict has accelerated the EU’s shift in its power‑generation mix, amplifying the substitution effect between gas‑fired and coal‑fired plants. Rising natural‑gas prices and supply constraints have elevated the strategic importance of energy security, which will likely take precedence over emissions‑reduction goals for the foreseeable future. European countries such as Germany and Italy have indicated they may revive coal‑fired power generation, further bolstering the global demand for coal. With global capital spending on coal remaining persistently low and the global fossil‑fuel supply curve steep, coal prices are projected to continue rising and stay office.

Recently, multiple government departments have successively sent out positive signals, laying a solid foundation for the stable development of the real estate market.
Since the second half of last year, the real estate market has been on a downward trajectory, influenced by multiple factors. Since the beginning of this year, concerted efforts across all sectors have helped stabilize land prices, housing prices, and market expectations, leading to a stabilization and recovery in the property market. At present, clear signs of market differentiation are emerging.
Recently, the Financial Stability and Development Committee of the State Council convened a special meeting, calling for timely research and the formulation of robust, effective measures to prevent and defuse risks in the real estate sector, as well as complementary policies to support a transition to a new development model. Subsequently, the People’s Bank of China, the China Securities Regulatory Commission, the China Banking and Insurance Regulatory Commission, and the State Administration of Foreign Exchange have also successively sent out positive signals. Experts believe that the statements issued by the Financial Stability and Development Committee and relevant authorities, along with the forthcoming policy measures, will provide crucial support for stabilizing market expectations and fostering the steady, healthy development of the real estate sector.
An asymmetric recovery pattern is emerging.
Recently, the National Bureau of Statistics released data on price changes for commodity residential housing in 70 large and medium-sized cities for February. According to Sheng Guoqing, Chief Statistician of the Urban Division of the National Bureau of Statistics, in first-tier cities, both new‑home and existing‑home sales prices rose month over month, while in second- and third-tier cities they remained flat or declined. Year‑on‑year growth in commodity residential prices slowed or stalled in first- and second-tier cities, whereas in third-tier cities it fell compared with the same period last year.
Wang Ruimin, an associate researcher at the Institute for Market Economy of the Development Research Center of the State Council, believes that February’s housing price data for 70 major and medium-sized cities indicate an overall trend of market recovery. As first-tier cities serve as bellwethers for the national real estate market, their rebound is expected to gradually help stabilize the property markets in second- and third-tier cities.
Xu Xiaole, chief market analyst at the Shell Research Institute, believes that February saw an asymmetric recovery in housing prices. Price adjustments in first-tier cities outpaced those in second- and third-tier cities: Beijing and Shanghai both recorded wider month-on-month gains in their secondhand home price indices, Guangzhou reversed its downward trend to post gains, and Shenzhen’s decline narrowed; meanwhile, second- and third-tier cities continued to see month-on-month declines in secondhand home prices. Meanwhile, the average month-on-month drop in new-home prices across 70 cities widened slightly compared with January, largely reflecting insufficient momentum in the housing markets of second- and third-tier cities.
Reasonable demand remains to be unleashed.
According to the financial data statistics report for February recently released by the People’s Bank of China, medium- and long-term household loans decreased by RMB 45.9 billion year on year. Industry insiders generally believe this reflects a subdued willingness among residents to purchase homes, while also indicating that further measures are needed to unleash reasonable housing demand and ensure the stable and sound development of the real estate market.
Since the beginning of this year, many cities have introduced or adjusted specific regulatory measures tailored to local conditions, with the aim of meeting homebuyers’ reasonable housing needs. These measures include relaxing purchase restrictions, abolishing the “both property‑and loan‑based” criteria for determining eligibility, lowering down payment requirements, increasing public housing fund loan limits, offering home‑purchase subsidies, and providing support for talent‑related home purchases.
Wang Ruimin believes that risks in the real estate market have not yet been fully resolved, with some companies still undergoing restructuring. The sector remains in a period of deep adjustment, and it will take time for market confidence to recover. As expectations of housing price increases weaken in certain cities, speculative demand—often “illusory”—is rapidly receding, while first-time homebuyers are adopting a wait-and-see approach, leading to a contraction in sales volumes. Policy support is needed to bolster market confidence and avert the risk of a hard landing in the real estate market.
Xu Xiaole believes that first-tier cities enjoy relatively robust housing demand, and with credit support, market expectations have rebounded more quickly. By contrast, second- and third-tier cities face weaker home‑buying demand, and many third-tier cities are burdened by substantial inventory, resulting in a slower recovery of market sentiment. Although policies introduced this year—such as lowering down payment requirements, easing household registration thresholds, and offering home‑purchase subsidies—have been concentrated in second- and third-tier cities, it will take time for these measures to yield tangible results, and further efforts are needed to effectively stimulate the release of housing demand. Moreover, consumer confidence on the demand side has yet to fully recover. Since March, recurring COVID‑19 outbreaks in some cities have also introduced uncertainty into the market.
Fu Linghui, spokesperson for the National Bureau of Statistics, stated that the real estate market has shown positive developments, with the downward trend beginning to ease. According to the real estate production index, the index declined year-on-year in the first two months, but the rate of decline has narrowed. The Government Work Report emphasized upholding the principle that housing is for living in, not for speculation, and supporting the commercial housing market in better meeting homebuyers’ reasonable housing needs. “We are confident that there are both the foundations and the conditions for the stable development of the real estate market,” he added.
Favorable policy measures help stabilize market expectations.
Recently, multiple government departments have issued statements on the operation of the real estate market. The People’s Bank of China stated that it will “prevent and defuse risks in the real estate sector”; the China Banking and Insurance Regulatory Commission said it will “actively promote a shift in the industry’s development model, encourage institutions to prudently and orderly extend merger-and-acquisition loans, and prioritize supporting high-quality developers in acquiring the sound projects of struggling offices”; the China Securities Regulatory Commission indicated that it will “work closely with relevant authorities to effectively and decisively mitigate risks facing real estate enterprises”; and the State Administration of Foreign Exchange stated that it will “coordinate with pertinent departments to foster the healthy and stable development of the real estate market.”
Dong Ximiao, chief researcher at China Merchants Bank Financial Services, believes that in the future, real estate financial policies should be further adjusted and optimized to meet the normal financing needs of real estate enterprises and the reasonable housing consumption demands of households. At present, with ample liquidity and declining funding costs, local governments and financial institutions should be encouraged to fine-tune real estate financial policies, particularly mortgage‑lending policies.
More importantly, we must further explore new models for real estate development, uphold the dual approach of renting and buying, accelerate the growth of the long-term rental housing market, and advance the construction of affordable housing. Financial institutions should seize this opportunity to promptly optimize the structure of their real estate‑related financial services, develop innovative products and solutions tailored to the housing‑rental market, and strengthen their support and service offerings in this sector.
Xu Xiaole believes that resolving risks in the real estate sector requires coordinated efforts among the government, property developers, and financial institutions to reallocate capital and resources within the industry, while also creating conditions that enable some developers to exit the market or undergo transformation in an orderly manner.
Recently, a responsible official from the Ministry of Finance, responding to media inquiries regarding the pilot program for real estate tax reform, stated: “The pilot program is being carried out under the authorization of the Standing Committee of the National People’s Congress. Some cities have conducted preliminary surveys and initial research; however, after comprehensively considering all relevant factors, conditions do not yet exist this year to expand the number of pilot cities.”
Industry insiders believe that the plans and timing for expanding the real estate tax pilot program during the market adjustment phase have attracted widespread attention, and the Ministry of Finance’s recent statement will play a highly positive role in stabilizing market expectations.

The National Development and Reform Commission has mandated that medium- and long-term coal supply contracts must specify price levels to prevent sharp spikes or plunges in coal prices.
　In response to the chaos in the coal market, the state has finally finalized a special inspection campaign focused on the signing and fulfillment of long-term contracts.
According to the National Development and Reform Commission on March 18, in order to further improve the signing and performance of medium- and long-term coal contracts, standardize contracting practices, ensure full and effective contract execution, and promote strict compliance, thereby guaranteeing a stable and reliable supply of coal for power generation and heat supply, a special inspection will be conducted in the near term to assess the status of 2022 medium- and long-term coal contract signing and performance across all regions and at central enterprises.
In fact, as early as December 3 last year, the National Coal Trading Fair of the National Development and Reform Commission released a draft proposal seeking public input on the 2022 long-term coal contract signing and fulfillment plan. The draft explicitly stated that the scope of long-term coal contracts for 2022 would be further expanded: in principle, all coal-producing enterprises with an approved production capacity of 300,000 tons or more would be included; on the demand side, power generation and heat-supply enterprises were required to secure 100% of their coal needs—excluding imported coal—through long-term contracts.
Du Meng, chairman of the China Enterprise Capital Alliance, told a reporter from the Huaxia Times: “The NDRC’s launch of a special inspection into the fulfillment of coal‑supply contracts demonstrates the efficient implementation of the state’s decisions and arrangements to deepen supply-side structural reform in the coal sector.”
Yang Jinghao, chief economist at Kangkai Data Technology, told our reporter: “The expansion of the scope for long-term coal supply contracts is one of the measures taken to fundamentally promote the development of a new, more effective pricing mechanism in the coal market, following last year’s regulatory policies by the National Development and Reform Commission aimed at ensuring supply and stabilizing prices.”
Falsifying yin-yang contracts is strictly prohibited.
The notice explicitly requires all localities and relevant enterprises to conduct self‑inspections and assessments in accordance with the policy requirements for contract performance, and to promptly rectify any non‑compliant items. It mandates that medium- and long‑term contracts be fully concluded: coal enterprises must ensure that the volume of such contracts accounts for at least 80% of their own resource holdings, while power‑generation and heat‑supply companies must achieve full coverage of their annual coal consumption through medium‑ and long‑term supply‑demand agreements. Contracts must also be substantively executed: each medium‑ and long‑term coal contract must specify a price level within a reasonable range or incorporate an applicable pricing mechanism. Furthermore, the signing of these contracts must be standardized, with each agreement clearly defining key terms, including quantity, quality, duration, destination, mode of transport, liability for breach, and dispute‑resolution procedures. Finally, contract performance must be strictly enforced: all signed contracts are to be entered into the national coal trading center’s online platform for oversight, with monthly online reporting of compliance status; no loopholes, compromises, or falsification shall be permitted.
In addition to curbing improper conduct, the National Development and Reform Commission also commends exemplary practices based on actual circumstances. The notice states that verification teams will conduct in-depth inspections across regions and at central enterprises by reviewing original data and documentation, holding symposiums, conducting individual interviews, and carrying out on-site investigations. Depending on the findings, entities with strong contract‑performance records will be recognized and rewarded, while those with poor performance will be held accountable in accordance with relevant regulations on energy supply security. Contract‑signing and performance outcomes will be recorded in corporate credit files and linked to policy measures such as capacity approval and expansion, as well as transport‑capacity allocation.
In addition, to ensure that coal supply contracts are duly signed and fully fulfilled, the National Development and Reform Commission stated that it will establish a daily meeting and weekly reporting mechanism for monitoring the signing and performance of medium- and long-term coal contracts. Progress will be tracked on a daily basis by province and by central state-owned enterprise, with weekly updates on contract‑signing and fulfillment status. Effective immediately, the Commission will solicit from local authorities and coal‑producing, transporting, and consuming enterprises typical cases of inadequate, inaccurate, non‑standard, or unfulfilled medium‑ and long‑term coal contracts, and will impose strict disciplinary measures and issue public notifications accordingly.
Reporters have learned that bundled sales of coal are a common practice in the coal industry. Some coal mines even combine annual long-term contracts, monthly agreements, and spot transactions in fixed proportions and sell them to power plants, thereby creating fictitious contracts that disrupt the normal fulfillment of coal supply obligations. Following a special audit of coal contract performance, all coal trading contracts will be registered on the National Coal Trading Center’s online platform, with performance commitments signed electronically. These contracts will also be subject to oversight through the official website’s Integrity‑Based Performance Assurance Platform, effectively curbing practices such as circumventing contractual terms, offering discounts, and engaging in fraudulent behavior.
What is the impact on businesses?
Previously, the market‑based pricing mechanism for coal was established and refined; now, the National Development and Reform Commission has launched a special inspection to verify the signing and fulfillment of medium- and long‑term coal contracts. The coal market has consistently been a key focus of national policy. This latest special inspection initiated by the NDRC is likewise of great significance.
Du Meng told a reporter from the Huaxia Times that the National Development and Reform Commission’s special inspection of coal contract compliance demonstrates the efficient implementation of the state’s strategic decisions to deepen supply-side structural reform in the coal sector. Only by strengthening enterprises’ principal responsibility, enhancing market awareness, innovating coal‑trading models, promoting clean and efficient coal utilization, and improving the nation’s capacity to ensure a safe and stable coal supply can we effectively build a unified, open, and orderly national coal‑trading market system.
Yang Jinghao also told our reporter: “The expansion of the scope for long-term coal supply contracts is one of several measures taken, from a fundamental‑level perspective, to establish a new, more effective pricing mechanism in the coal market, following last year’s NDRC‑led policy interventions aimed at ensuring supply and stabilizing prices.” Over the past year and a half, coal prices have more than quadrupled, with the main thermal coal contract price rising from a low of 476.4 yuan per ton to last year’s peak of 1,982 yuan per ton. Accordingly, the issuance of this special inspection notice, in a sense, helps curb undesirable practices in the coal market and further refines the market‑based pricing mechanism for coal.
“This is also of great significance for the national economy,” Yang Jinghao noted. He added that standardizing contractual practices will effectively mitigate price volatility faced by power generation and heat‑supply enterprises, leading to a corresponding decline in their coal demand. As a result, the coal market will avoid the kind of seasonal surges in demand that can disrupt price mechanisms and trigger sharp price spikes. Consequently, the supply of coal to meet essential public needs will become more stable.

Taxation TAXATATION
Real financial support to help businesses alleviate difficulties and achieve development.
Tax and fee reductions are a key measure to help businesses overcome difficulties. This year’s Government Work Report clearly states that we will implement a new package of tax and fee support policies, combining temporary measures with institutional arrangements, and simultaneously pursuing both tax cuts and tax refunds.
By implementing a series of policies, tax refunds and reductions are expected to total approximately RMB 2.5 trillion for the year, with about RMB 1.5 trillion in carryforward VAT refunds. The scale of VAT carryforward refunds has been significantly expanded, and these concrete measures will strongly bolster market confidence.
Implement large-scale refunds of outstanding tax credits.
A total of 1.5 trillion yuan in deferred tax refunds has been disbursed directly to businesses, with policy measures exceeding expectations. This represents the most significant highlight of this year’s tax and fee reduction initiatives, greatly boosting morale among numerous enterprises.
Since 2019, China has gradually established a system of incremental value-added tax credit refunds, benefiting numerous enterprises. Fujian Baihong Polyfiber Technology Industrial Co., Ltd., the largest producer of polyester fiber and polyester film in South China, received over RMB 250 million in incremental VAT credit refunds in 2021. “In recent years, both the central and local governments have vigorously implemented tax and fee reduction measures. Our company has reaped substantial benefits from these policies—particularly the VAT credit refund, which has provided strong support to advanced manufacturing, significantly bolstering our confidence and momentum for transformation and upgrading,” said Su Qiong, workshop director of the Quality Control Department at Baihong.
What is the value-added tax (VAT) credit refund? VAT is China’s largest tax, operating under a chain‑based input‑output credit system, whereby the tax payable is the balance remaining after deducting input VAT from output VAT for the current period. When input VAT exceeds output VAT, the uncredited portion constitutes a VAT credit.
Experts analyze that the carryforward VAT credit primarily arises from timing mismatches between taxpayers’ input VAT and output VAT—for example, when raw materials and inventory are purchased in bulk but have not yet been fully sold, or when there is no revenue during the investment phase. Moreover, under a multi‑rate tax system, if the rate applicable to sales is lower than the rate applicable to inputs, a carryforward VAT credit will also accumulate.
“The carryforward VAT refund essentially returns to taxpayers the amount of VAT that remains uncredited at the end of a tax period,” said Li Xuhong, Director of the Institute for Fiscal and Tax Policy and Application at the National Accounting Institute in Beijing. This year, by advancing the refund of undeducted taxes, the policy has directly injected approximately RMB 1.5 trillion in cash flow into market entities, bolstering corporate liquidity—particularly by freeing up funds that would otherwise have been difficult to offset when purchasing equipment. This helps strengthen businesses’ confidence in expanding reproduction and encourages them to allocate more resources to production‑related activities such as technological research and development.
The Government Work Report clearly states that this year, large-scale refunds of outstanding input VAT credits will be implemented ahead of schedule. Priority will be given to small and micro enterprises: their existing outstanding input VAT credits will be fully refunded in a single payment by the end of June, while any newly incurred credits will be refunded in full. Special emphasis will be placed on supporting the manufacturing sector, with comprehensive measures to address the issue of refunding outstanding input VAT credits across industries including manufacturing, research and technical services, ecological and environmental protection, electricity and gas, and transportation.
“Stepping up reforms to expand the carryforward VAT refund will not only substantially ease the tax burden on enterprises but also help standardize and optimize the tax system, making it a key measure and a powerful tool in this year’s tax and fee reduction efforts,” said Feng Qiaobin, Deputy Director of the Department of Macroeconomic Research at the Development Research Center of the State Council.
As an important component of the tax and fee reduction policies, the speed of refunding outstanding input VAT credits is one of the key factors influencing the effectiveness of these policy benefits. “Not long ago, our company applied for a refund of over 20 million yuan in outstanding input VAT credits. The tax authorities provided an ‘instant‑processing, rapid‑refund’ service, crediting the funds to our account within half a day, which offered strong cash‑flow support as we navigated challenges such as the suspension of cruise operations due to the pandemic. This year, the state plans to comprehensively address the issue of outstanding input VAT credit refunds in key sectors like transportation, giving us greater confidence in the company’s future development,” said Hu Shuting, a tax officer at Xiamen International Cruise Homeport Group Co., Ltd.
Precision drip irrigation for small and micro enterprises
Small, medium, and micro enterprises are vital to employment and people’s livelihoods, yet they face significant challenges. In 2021, tax‑relief policies supporting the development of these businesses generated an additional tax reduction of RMB 295.1 billion, accounting for 29.3% of the nation’s total new tax cuts. This year, measures to cut taxes and fees will further strengthen support for them. The Government Work Report explicitly states that tax‑and‑fee relief policies for the manufacturing sector, small and micro enterprises, and individual business households will be extended, with increased relief amounts and broader coverage; value‑added tax will be temporarily exempted for small‑scale taxpayers; and corporate income tax on the portion of annual taxable income between RMB 1 million and RMB 3 million for small and micro enterprises will be reduced by another 50%.
Feng Qiaobin analyzes that, in 2022, tax and fee reductions placed greater emphasis on the precision and targeted nature of policy measures, “primarily focusing on small, medium, and micro enterprises, individual business households, the manufacturing sector, and technology offices—key and vulnerable links in the national economy as well as in industrial and supply chains—and implementing tailored policy support. This approach is largely driven by the fact that, with the impact of the pandemic still not fully abated, small, medium, and micro enterprises and individual business households remain the segments most severely affected by the economic downturn.”
Since the beginning of this year, the Ministry of Finance and the State Taxation Administration have issued multiple documents clarifying tax and fee reduction policies for small, medium, and micro enterprises. For example, the policy allowing small, medium, and micro manufacturing enterprises to defer payment of certain taxes and fees has been extended for another six months, delivering tangible benefits to businesses. During its implementation in the fourth quarter of 2021, this measure proved highly effective, with a total value of RMB 216.2 billion—equivalent to the government providing these enterprises with an “interest-free loan,” thereby easing their financial pressures.
This year, the decision to implement large-scale, early refunds of outstanding input VAT credits, with a clear priority given to small and micro enterprises, is undoubtedly a substantial “gift package” for them. “Our company makes significant investments in equipment and R&D, and cash flow has long been a major constraint on our growth. The policy of providing large-scale refunds of input VAT credits could not have come at a more opportune time, effectively easing our financial pressures and boosting our cash flow,” said Zhang Shanshan, the finance director of Zhejiang Liulian Lighting Technology Co., Ltd. According to estimates, the company will be able to file a one-time application for a refund of over 1.5 million yuan in outstanding input VAT credits by the end of June.
“Precision‑targeted tax and fee reductions for small, medium, and micro enterprises are one of the key priorities of this year’s policy package,” said Li Xuhong. She added that a series of measures and policies can effectively ease cash‑flow pressures on these businesses, provide robust financial support for their production and operations, further invigorate corporate growth, improve the labor market, and help ensure the steady and orderly functioning of the macroeconomy.
Ensure the thorough and meticulous implementation of policies.
The scale of tax cuts and tax refunds is unprecedented, which will inevitably place some pressure on local finances. The Government Work Report makes clear that the central government will strengthen financial support to local governments by channeling subsidy funds directly to cities and counties. Local governments and relevant departments are required to establish and improve working mechanisms, enhance fund allocation and management, and ensure the effective implementation of this crucial measure of tax refunds and reductions.
According to the budgetary plan, central government transfers to local governments will increase by approximately RMB 1.5 trillion, bringing the total to nearly RMB 9.8 trillion—a rise of 18%, the largest annual increase in many years.
“Against the backdrop of mounting fiscal pressure at the local level, ensuring the effective implementation of more robust tax and fee reduction policies requires increasing central government transfer payments to local governments to offset the decline in local tax revenues. This year, a substantial rise in central‑to‑local transfer payments underscores that these tax and fee cuts are being actively coordinated with other fiscal measures, working in tandem to alleviate businesses’ difficulties and bolster market confidence,” said Pan Yue, Professor of Finance at the School of Economics, Xiamen University.
Liu Xingyun, Director of the Shandong Provincial Department of Finance, stated that this year’s measures to cut taxes and fees are underpinned by stronger safeguards. The central government has earmarked special transfer payments, prioritizing regions most affected by these tax and fee reductions to ensure the stable operation of local finances and officely uphold the “three guarantees” bottom line. As a result, local governments now feel more confident and better equipped to implement this year’s tax and fee‑cutting initiatives.
This year, ensuring the effective implementation and full impact of the new package of tax and fee support policies is a massive and complex systemic undertaking, involving numerous policy measures and a wide array of tax and fee types. According to the State Taxation Administration, the tax authorities are currently vigorously advancing all related implementation efforts. “The tax authorities will treat the thorough and meticulous execution of these new tax and fee support policies as a top priority. From the State Taxation Administration down to provincial, municipal, and county-level tax bureaus, dedicated task forces have been established to oversee policy implementation, continuously refining working mechanisms, breaking down tasks into specific components, and aligning operations with set benchmarks to ensure that the benefits of these policies reach market entities in a timely manner,” said a spokesperson from the State Taxation Administration.

In 2022, China implemented large-scale tax refunds for outstanding input VAT credits.
The力度 of the carryforward VAT refund has been increased.
— By addressing both new and existing stock, we expect to provide market entities with RMB 1.5 trillion in cash flow over the course of the year.
The value-added tax payable for the current period equals the output tax for the period minus the input tax for the period. Under the current VAT system, if a company’s output tax for a tax period is less than its input tax, a carryforward tax credit will arise.
What are the main causes of input VAT credit? Li Xuhong, Director of the Academic Committee at the National Accounting Institute in Beijing, explains that input VAT credit primarily arises from a timing mismatch between taxpayers’ input taxes and output taxes—for example, when raw materials and inventory are purchased in bulk but have not yet been fully sold, or when large-scale purchases are made during the preparatory phase without any corresponding revenue. Additionally, under a system where multiple tax rates coexist, if the tax rate applicable to sales is lower than the rate applicable to inputs, this can also give rise to input VAT credit.
According to available information, there are generally two approaches internationally for handling input VAT credits: First, taxpayers are permitted either to carry forward the credit to offset against future tax liabilities or to apply for a refund in the current period. Even in jurisdictions that allow refunds, relatively stringent conditions are typically imposed, such as requiring the credit to exceed a specified threshold. Second, taxpayers may only file for a refund once per year or over a defined period, and refunds may be limited to specific industries.
To alleviate the financial pressures faced by enterprises, China introduced a pilot program on April 1, 2019, to refund the carryforward input VAT at the end of the tax period. Starting June 1, 2019, the eligibility criteria for such refunds were relaxed for certain taxpayers in advanced manufacturing sectors. In April 2021, the scope was further expanded to include advanced manufacturing industries such as pharmaceuticals, chemical fibers, and railways.
On March 5, Song Li, Director-General of the Department of International Affairs at the State Council Research Office, stated at a press conference held by the State Council Information Office that China’s current carryforward VAT refunds are primarily focused on incremental credits—refunding only the portion of credits accumulated since April 2019. Specifically, all incremental credits held by advanced manufacturing enterprises are fully refunded, while other sectors receive a 60% refund; no refunds have yet been granted for existing carryforward credits arising prior to March 2019. A major highlight of this policy update is its dual‑pronged approach, addressing both incremental and existing credits and significantly stepping up the scale of refunds. According to Song Li, under the current backdrop of substantial downward economic pressure, this measure will help businesses regain momentum and resume growth. “Following this year’s implementation of large‑scale carryforward VAT refunds, further reducing remaining stockpiles and promptly refunding new credits going forward will be of great significance for refining and improving the value-added tax system,” he added.
This also means that the value-added tax credit refund will play a key role in the 2022 package of tax and fee reductions, directly injecting approximately RMB 1.5 trillion in cash flow into market entities. According to Zhu Qing, a professor at the School of Finance and Public Administration of Renmin University of China, factors such as shrinking demand have left some enterprises with insufficient revenue and tight cash flows. At the same time, companies require substantial cash to purchase raw materials and cover expenses like wages, interest payments, and rent. “Promptly processing VAT credit refunds and delivering tangible funds to businesses is akin to providing timely assistance in times of need, which will significantly help ease financial pressures, stabilize market expectations, and boost business confidence.”
Prioritize small and micro enterprises.
— The outstanding input VAT credit of small and micro enterprises will be fully refunded in a lump sum by the end of June, and any newly generated input VAT credit will be refunded in full.
The value-added tax (VAT) credit refund system has been continuously refined, playing a vital role in supporting the real economy. According to data from the State Taxation Administration, in 2021, VAT credit refunds totaling RMB 132.2 billion were processed for the manufacturing sector, benefiting 31,000 enterprises.
Who will benefit from the 1.5 trillion yuan in additional tax refunds in 2022?
From an industry perspective, Song Li stated that the carryforward VAT refund will prioritize support for the manufacturing sector, comprehensively addressing the carryforward VAT refund needs of manufacturing, research and technical services, ecological and environmental protection, electricity and gas, and transportation industries.
From the perspective of enterprise size, priority will be given to small and micro enterprises. Given their large numbers, these offices also account for a significant share of taxpayers with outstanding input VAT credits, making them the primary beneficiaries of this round of VAT credit refunds. This measure will effectively ease their financial constraints and boost their vitality. Moreover, to ensure effective implementation, the central government will increase fiscal support to local governments, alleviating their budgetary pressures and ensuring timely and full refunds where due.
So, how are businesses feeling?
“Affected by the pandemic, the hospitality industry has endured a challenging period over the past two years. Thanks to various relief policies, our hotel’s operations are steadily improving,” said Pan Yubai, a finance professional at Chongqing Wintley Hotel. In 2021, meeting the criteria for the incremental value-added tax credit refund, the hotel received more than RMB 800,000 in refunds, which helped ease its rent‑payment burden. “We currently hold over RMB 500,000 in outstanding tax credits. Under this year’s new policy for small and micro enterprises, we will receive a one‑time refund of these funds, further bolstering our cash flow and strengthening our confidence in maintaining stable operations,” Pan Yubai added.
The Government Work Report states that, as part of this year’s large-scale tax refund program for outstanding input VAT credits, all existing input VAT credits held by small and micro enterprises will be fully refunded by the end of June, while incremental input VAT credits will be refunded in full. Industry insiders note that this marks the first time that existing input VAT credits for small and micro enterprises are being refunded, and that the policy has been revised from proportionate refunds of incremental input VAT credits to full refunds.
Li Ping, deputy director of the Tax Science Research Institute of the State Taxation Administration, analyzed in an interview with this newspaper that implementing a full‑amount refund of outstanding VAT credits for small and micro enterprises can reduce their capital‑occupation costs, improve cash flow, alleviate pressures such as funding shortages and difficulty accessing financing, and bolster their confidence in expanding reproduction. This measure will play a positive role in helping struggling enterprises turn losses into profits, lowering start‑up costs for new ventures, and encouraging offices to grow stronger and larger, thereby contributing to stabilizing market entities, safeguarding employment, and maintaining macroeconomic stability.
From the perspective of policy effectiveness, the substantial cash flow generated by the approximately RMB 1.5 trillion in additional tax refunds will play a crucial role in helping businesses overcome difficulties. “The refund funds are being delivered directly to enterprises, which not only represents a major improvement to the value-added tax credit refund system but also provides robust liquidity support, boosts consumption and investment, and injects much-needed ‘blood’ and ‘vitality’ into market entities, alleviating their challenges,” said an official from the State Taxation Administration.
Ensure the effective implementation of policies.
— The central government has substantially increased transfer payments to local governments, and the People’s Bank of China has remitted over one trillion yuan in retained profits to the central treasury, thereby supporting the refund of outstanding input VAT credits.
The value-added tax (VAT) credit refund places high demands on the level of tax collection and administration. How can we enhance tax administration, ensuring tax revenue security and mitigating the risk of tax fraud, while effectively implementing the comprehensive package of tax and fee support measures, including the VAT credit refund?
Li Ping stated that implementing and consolidating the large-scale policy of refunding outstanding input VAT credits is a massive and complex systemic undertaking. “In terms of specific measures, we will fully leverage the power of tax‑related big data, continue to promote ‘non‑contact’ tax filing and payment, further streamline procedures, reduce documentation requirements, and simplify processing methods. Through channels such as the electronic tax bureau and taxpayer‑administration interaction platforms, we will ensure that the benefits of tax refunds reach taxpayers as swiftly as possible. At the same time, we will make full use of modern information technologies—including big data, cloud computing, artificial intelligence, and mobile internet—to drive innovation in tax enforcement, services, and regulatory systems, as well as business transformation. We will strengthen oversight and inspection of policy implementation, improve the mechanism for investigating and prosecuting violations, and, by relying on the national ‘Internet Plus Supervision’ system’s capabilities for aggregating diverse data, effectively and precisely crack down on fraudulent claims for tax and fee concessions, thereby safeguarding national tax revenue security,” Li Ping said.
An official from the State Taxation Administration stated that, at present, dedicated task forces have been established at all levels—from the State Taxation Administration down to provincial, municipal, and county tax authorities—to ensure the effective implementation of tax and fee support policies. To expedite preparatory work on tax collection and administration, the tax system promptly collaborated with the Ministry of Finance and other relevant departments to issue announcements clarifying specific policy provisions and operational procedures, deploy preparatory measures, and upgrade and adjust the tax collection and administration information system. These efforts are designed to ensure that policies are easy to administer, straightforward to implement, and swiftly put into practice, “so that reductions, exemptions, deferrals, and refunds are fully and effectively delivered, enabling market entities and the general public to experience tangible benefits.”
Monetary policy will also be coordinated and aligned with fiscal policy. In 2022, the People’s Bank of China remitted over one trillion yuan in retained profits to the central government in accordance with the law, primarily to fund carryover tax refunds and increase transfer payments to local governments. According to a responsible official at the Ministry of Finance, under this year’s new package of tax and fee support measures, certain state-owned financial institutions and specialized agencies were instructed to remit a portion of their retained profits accumulated prior to 2021, which was then used to substantially boost transfer payments to local governments, helping local treasuries—particularly those at the county and district levels—to alleviate revenue shortfalls.
Going forward, how can we effectively implement the integrated tax and fee support policy that combines phased measures with institutional arrangements, and simultaneously pursues both tax reductions and tax refunds?
Zhao Jing, Deputy Director of the State Taxation Administration, stated that the tax authorities will continue to refine the mechanism for ensuring that tax and fee preferential policies are delivered swiftly and directly to eligible taxpayers and payers. They will precisely identify those who meet the eligibility criteria, enable targeted policy outreach, and pilot the issuance of “tax‑and‑fee reduction benefit statements” through channels such as the electronic tax bureau, thereby further enhancing taxpayers’ and payers’ sense of gain from these measures. In addition, the tax authorities will fully leverage tax‑related big data to conduct robust monitoring and analysis, ensuring that the full impact of these policies is realized and better reflected in practice.

Individuals such as those who are “caring for elderly parents and young children” are given priority processing for tax refunds.
Since the launch of the 2021 individual income tax final settlement on March 1, the tax authorities, in conjunction with the 2022 “Doing Practical Things for Taxpayers and Payers” initiative and the Spring Breeze Campaign to Facilitate Tax Services, have, following the introduction of an appointment‑based service for the final settlement, rolled out a priority refund measure for taxpayers who are caring for elderly parents or young children and those facing heavy medical expenses. As of March 9, 3.446 million taxpayers meeting the eligibility criteria for priority refunds had submitted refund applications; among them, 2.004 million have already received their refunds, totaling RMB 2.72 billion.
According to a responsible official from the State Taxation Administration, taxpayers who, during the 2021 individual income tax final settlement, simultaneously claimed both the special additional deductions for elderly care and children’s education, or the special additional deduction for major medical expenses, may receive their tax refunds on a priority basis if they submit their refund applications by March 15 in accordance with their scheduled appointment. After March 16, no appointment is required; taxpayers may directly apply for the annual final settlement and obtain priority processing of their tax refunds.
“This year, for those of us who are both caring for elderly parents and raising young children, the tax authorities introduced a priority refund service, and the refund was credited to my account in just two days,” said Mr. Li, an employee at a metal‑forging company in Anhui. On March 4, he completed his annual individual income tax settlement through the personal income tax app and scheduled a refund application; by March 6, he had already received a text‑message notification conofficeing that the refund had been deposited.
In addition to taxpayers who are caring for elderly parents and young children, those facing substantial medical expenses can also enjoy priority tax refunds. Ms. Zhang, a teacher at a primary school in Beijing, incurred significant medical costs in 2021. She completed her annual tax settlement according to her scheduled appointment and accurately reported her special additional deduction for major illness medical expenses, enabling her to claim a full refund of the taxes withheld and paid in advance. After submitting her application and having the relevant documents verified by the tax authorities as complete and accurate, the refund was fully credited to her account within three days. “I never expected the tax‑refund review process to be so swift,” Ms. Zhang said. “It has allowed people like us, burdened by high medical costs, to truly feel the government’s care.”

Litigation & Arbitration
The Supreme People’s Court has issued the Judicial Interpretation of the Anti-Unfair Competition Law.
On March 17, the Supreme People’s Court issued the “Interpretation on Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People’s Republic of China” (hereinafter referred to as the “Interpretation”), which took effect on March 20, 2022. The Interpretation comprises 29 articles and, in accordance with the revised Anti-Unfair Competition Law, provides detailed provisions on key issues such as Article 2 of the Law, acts of imitation and confusion, false advertising, and unfair competition practices conducted online.
The Interpretation is an important measure adopted by the Supreme People’s Court to thoroughly study and implement Xi Jinping’s Thought on the Rule of Law, fully leverage the role of intellectual property adjudication, and promptly address judicial needs arising in new fields and business models. Its implementation is of great significance for strengthening judicial protection against unfair competition, reinforcing the foundational status of competition policy, and fostering a unified domestic market that is efficient, well‑regulated, and characterized by fair competition.
The “Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the Anti-Unfair Competition Law of the People’s Republic of China” was adopted at the 1862nd meeting of the Judicial Committee of the Supreme People’s Court on January 29, 2022. It is hereby promulgated and shall enter into force as of March 20, 2022.

Supreme People’s Procuratorate: Deepen Source‑Tracing Governance on Public‑Concern Issues Such as Food and Drug Safety
On the 15th, the Supreme People’s Procuratorate released 12 typical cases of public-interest litigation by procuratorial organs concerning food and drug safety, focusing on emerging issues in the production and sale of food and drugs and offering replicable, scalable best practices for handling new types of cases.
According to the briefing, the 12 typical cases released this time include four involving food safety and eight involving pharmaceutical safety. Among these eight pharmaceutical‑safety cases, multiple stages—from production and distribution to use—are implicated, covering issues such as drug‑manufacturing quality, illegal trading, false advertising, and medication‑safety in medical institutions.
An official from the Eighth Procuratorial Office of the Supreme People’s Procuratorate stated that this batch of typical cases highlights how procuratorial organs have comprehensively employed a variety of measures—such as consultations, issuing prosecutorial recommendations, holding public hearings, filing lawsuits, and conducting follow-up oversight and “look-back” reviews—to effectively address public-interest harms. Some cases also demonstrate the procuratorial system’s efforts to strengthen food and drug safety safeguards for vulnerable groups, including minors and the elderly, while deepening source‑based governance of pressing livelihood issues and promoting systemic rectification of common problems within specific industries. The cases released this time further include three exemplary instances in which procuratorial organs brought criminal‑related civil public‑interest litigation seeking punitive damages, thereby deterring and warning potential offenders engaged in the production and sale of counterfeit goods.
In 2021, procuratorial organs nationwide filed and handled 30,000 public-interest litigation cases related to food and drug safety, a 10% increase year on year. Among these, over 26,000 cases were brought in the food safety sector, leading to the investigation and seizure of 480,000 kilograms of counterfeit and substandard food; more than 3,000 cases were filed in the pharmaceutical safety field, resulting in the identification and removal of over 1,400 kilograms of counterfeit or substandard drugs and smuggled pharmaceuticals.
Going forward, the procuratorial organs will focus on food and drug safety issues of public concern, strengthening their own-initiated investigations and placing a number of key cases under supervised management, thereby guiding public-interest litigation departments across the country to implement and refine their work on pharmaceutical‑safety-related public-interest litigation.

The Organization Department of the CPC Central Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Justice have issued the “Guiding Opinions on Establishing a Unified Pre-Service Training System for Legal Professionals.”
In order to earnestly implement the “Opinions on Improving the National Unified Legal Professional Qualification System” issued by the General Office of the CPC Central Committee and the General Office of the State Council (Document No. 25 [2015]), and to promote the establishment and implementation of a unified pre‑employment training system for legal professionals, the Organization Department of the CPC Central Committee, the Supreme People’s Court, the Supreme People’s Procuratorate, and the Ministry of Justice recently promulgated the “Guiding Opinions on Establishing a Unified Pre‑Employment Training System for Legal Professionals” (hereinafter referred to as the “Opinions”), and issued a notice requiring all regions and departments to conscientiously implement these guidelines in light of their specific circumstances.
The Opinions clearly state that a unified pre‑service training system for legal professionals shall be established and implemented, guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, with in-depth study and application of Xi Jinping’s Thought on the Rule of Law, full implementation of the spirit of the 19th National Congress of the Communist Party of China and all plenary sessions of the 19th CPC Central Committee, and thorough adherence to the spirit of the CPC Central Committee’s Conference on Comprehensively Promoting the Rule of Law. This initiative aims to deepen supply‑side structural reform in the field of rule‑of‑law talent development, enhance the quality of such talent, and strive to build a contingent of socialist rule‑of‑law professionals who are loyal to the Party, the country, the people, and the law, thereby providing robust human‑resource support for advancing the modernization of the national governance system and governance capacity.
The “Opinions” stipulate that, in accordance with the principles of “unified standards and system‑by‑system implementation,” as well as the requirements of “those who select shall provide training” and “select first, train later,” the coordinating body, division of responsibilities, and implementing agencies for unified pre‑employment training shall be clearly defined. Newly appointed judges, prosecutors, and arbitrators (in legal fields), as well as applicants seeking to practice as lawyers or notaries, must undergo pre‑employment training; only those who pass the training may be authorized to engage in the relevant legal professions. Furthermore, based on local conditions and in an orderly manner, pre‑employment training shall be advanced for civil servants (including personnel managed in accordance with the Civil Service Law) in administrative organs who are slated to undertake, for the first time, legal review of administrative penalty decisions, administrative reconsideration, administrative adjudication, or legal advisory duties.
The “Opinions” stipulate that pre‑service training is divided into two phases: a centralized instruction phase and a post‑placement internship and comprehensive training phase. The centralized instruction phase primarily covers political theory, professional ethics, and practical legal skills, delivered through a combination of on‑site, full‑time training, courtroom simulation exercises, remote video instruction, and self‑study via online learning platforms. The post‑placement internship and comprehensive training phase focuses on hands‑on experience in judicial adjudication, procuratorial work, advocacy, notarization, arbitration, administrative reconsideration, administrative adjudication, and legal review of administrative penalty decisions, while also engaging trainees in auxiliary tasks such as reviewing case files and drafting legal documents, thereby enhancing their practical competence.
In addition, the Opinions set forth provisions regarding training and assessment, the development of training syllabi and teaching materials, the establishment of a faculty pool, record‑keeping, and the provision of benefits and allowances during the training period.

Ministry of Public Security: Last year, more than 75,000 criminal cases involving counterfeiting and intellectual property infringement were solved nationwide.
Today is “March 15 Consumer Rights Day,” and the Ministry of Public Security held a press conference to brief the public on the nationwide efforts by public security organs to safeguard food and drug safety and crack down on counterfeit and intellectual property‑infringing activities. According to the briefing, in recent years, the Ministry has continuously launched the “Kunlun Operation.” Last year, during the “Kunlun 2021” special campaign, public security agencies across the country solved more than 75,000 related criminal cases and apprehended over 99,000 suspects.
Among these efforts, public security organs across the country, in conjunction with routine epidemic prevention and control measures, have focused on the urgent needs of the public regarding vaccination, maintained a strong deterrent posture, and officely safeguarded the safety baseline for vaccines. They have cumulatively identified and verified over 2,900 leads, successfully solved a number of major cases—including the exceptionally large case involving Kong’s production and sale of counterfeit vaccines—effectively nipping vaccine-related crimes, which are deeply abhorred by the public, in the bud, thereby providing robust support to the overall epidemic prevention and control effort.
Recently, the Ministry of Public Security has issued a comprehensive plan for the “Kunlun 2022” special campaign. Focusing on five key areas—food safety, pharmaceutical safety, ecological and environmental safety, intellectual property protection, and wildlife conservation—the campaign targets fifteen prominent issues, including crimes involving the online sale of toxic and harmful food in the context of the “internet celebrity” economy. Efforts are being made to address shortcomings, strengthen weak links, consolidate foundational work, and enhance capabilities, while maintaining sustained enforcement力度 and continuously boosting the public’s sense of gain, happiness, and security.

 
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